Fewer Civil Penalties, But More Disgorgement in 2016 ALJ Enforcement Actions

SEC SealWhile civil penalties are down in Securities Exchange Commission administrative law judge enforcement actions this year, 2016 is on pace to have more actions involving disgorgement penalties than in the previous year, according to Bloomberg Law data.

Thus far, there have been 12 actions involving disgorgement penalties in 2016, while there were 14 such actions in all of 2015. 

SEC ALJ Q3 2016 Disgorgement

By contrast, 2015 saw 21 actions involving civil penalties, but only 9 actions this year have involved civil penalties.

Despite the decrease in the number of civil penalties, there have already been more penalties over $2 million ordered this year than in any of the preceding three years.

SEC ALJ Q3 2016 Civil Penalties

Top Issues in 2016

Fraudulent schemes and material misstatements, misrepresentations and/or omissions have accounted for nearly half of the offenses charged this year, when looking at the top 10 issues, followed by investment advisory fraud and market manipulation.

SEC ALJ Q3 2016 Top Issues

The Bigger Picture

From 2013 through the third quarter of 2016, there have been 201 SEC ALJ initial decisions.

In Q3 this year, there were 10 actions, which is down from 18 enforcement actions in Q3 last year.

Overall, there were 53 actions through Q3 last year, but there have only been 31 through Q3 this year.


SEC ALJ Enforcement Activity 2013 - Q3 2016

There were 61 total enforcement actions in all of 2015.  It will need to be an extremely active Q4 to get close to that number by the end of 2016.

You can read more analysis on the Q3 numbers here.

For more information on Administrative Law Judge actions, see Bloomberg Law’s SEC ALJ Enforcement Analytics and SEC ALJ Enforcement Tracker.